Case Study: Eastman Kodak Co.

By Laura Rich  |  Posted 06-01-2004 Print Email
Self-Service Target Retail Customers
Challenge
One-stop-shop kiosk for a changing marketplace

Number of Users
15,000 and growing

Bottom Line
Saves retailers 50 percent on one-hour lab costs, doubles
single-visit sales

Key Technologies
Developed in-house by Kodak

Imagine a world where one-hour photo centers stand devoid of customers. That used to be one of Kodak's greatest fears, but it is less so now.

Although Kodak executives will remind you, with only a slight trace of defensiveness, that more people today still take pictures on film than with digital cameras, film-processing centers were the first to feel the squeeze from the transition to digital—just as travel agents were when online reservations took off. These locations, maintained by Wal-Mart, Rite-Aid and others, take up prized real estate, require labor and actually do very little to drive sales in other parts of the store. As film gives way to digital, they bring in less revenue and become even more costly.

Rather than being kicked out of the store, Kodak came up with a self-service solution in the form of two kiosks that handle all aspects of developing and printing images, whether from film or digital sources. The kiosks cost retailers half as much to set up as mini-labs, and they eliminate ongoing overhead altogether.

The kiosks, rolling out now, but tested with consumers over the last two years, also attack a consumer issue: Kodak's digital image. The company sold more cameras in the fourth quarter last year than any other manufacturer, but consumers still primarily view Kodak as a company that sells film. "We don't want to view ourselves as film or digital, we want to be the photographic answer for consumers," says Dan Sullivan, site general manager at the Kodak Austin Development Center. The digital aspect of the kiosks helps round out that image—a market position reinforced in recent national TV ads.

Kodak settled on a simple interface, coupled with an audio guide, in an attempt to maintain some of the feeling of interacting with a store employee. Two kiosks split the process: The first, the Kodak Film Processing Station, handles film drop-off and digital download from cameras and cell phones; the second focuses on image selection. In tests, Kodak found that a single kiosk created long lines of unhappy customers. Offering two kiosks reduced waiting time and let consumers wander around retail centers after depositing their film in the first kiosk. Kodak found that the four minutes of processing time produced an average of 15 minutes of shopping time. Even better, customers bought things.

The second kiosk, the Picture Maker, was targeted at reducing product waste and "empowering" customers. Here, customers can select the images they want and manipulate them—enlarging or cropping an image, say, or varying the size of their prints. This cut down on the printing of images that consumers didn't want, and it let them play the role of lab technician. Kodak saw customers designate fewer images for printing, but they left happier because they had more control over what they got for their money. The result? Fewer prints overall, but double the outlay: About half of the available images were actually printed, but customers tended to print more copies of the images they did want—10 to 13 individual images printed, although 15 to 18 prints walked out the door. A full quarter of customers opted for the more expensive 8 x 10 sizes, and half of the customers returned to make more prints from the free CD they received from the kiosks. Revenues doubled from an average of $6 per visit to $12.

Says Kodak's Sullivan, "This is what happens when consumers are given control and choice"



 

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